Business & contractsIndia

Rehearse the founder–investor term-sheet discussion

Make a first draft, then check it with a grown-up.

Practise asking what the investment buys, how dilution works, which clauses bind and what remains to be reviewed.

ImportantPeopleConversation script

Who it goes to: Founder and investor rehearsal roles; authorised parties and advisers for a real transaction

Where it applies: India; entity, state, tax and transaction-specific requirements need checking

Build this
01 · What is this?

This is a practice conversation about the main parts of a startup term sheet.

02 · When is it useful?

Use it before discussing investment terms so you can ask clear questions.

03 · Start here

Bring a current ownership picture and separate the cash amount from the valuation.

Gather your pieces

  1. Mark the output as rehearsal and distinguish invented assumptions from verified business facts.
  2. Collect the proposed term sheet, ownership model and existing obligations.
  3. Have advisers review a real investment and any clauses intended to bind.

Your starting text

Replace each [bracketed label] with your own verified details. Open the editor to make it yours, then read it through before sending.

TERM-SHEET REHEARSAL — FOUNDER AND INVESTOR
PRACTICE ONLY; NO OFFER OR ACCEPTANCE

Date: [Document date]
Practice participants and proposed business: [Participants]
Assumptions to test: [Assumptions]

FOUNDER: “First, what amount goes into the company, what instrument are you proposing, and is any amount paying an existing holder?”

INVESTOR: “The proposal we are practising is:
[Investment Proposal]”

FOUNDER: “What are the pre-money and post-money values, what is the ownership basis, and how are the option pool and existing convertibles treated?”

INVESTOR: “Our calculation and assumptions are:
[Ownership Model]”

FOUNDER: “Please show both the proposed new holding and the dilution for existing holders. I will reconcile those numbers before treating them as agreed.”

FOUNDER: “What control, information, financial and exit rights are actually proposed?”

INVESTOR: “The specific rights and limits to discuss are:
[Rights Questions]”

FOUNDER: “Which clauses are intended to be binding now? I want confidentiality, exclusivity, costs and dispute terms addressed separately rather than calling the whole sheet nonbinding.”

INVESTOR: “The intended status and open questions are:
[Binding Questions]”

FOUNDER: “What must happen before completion, who has authority to approve it, and what happens if a condition is not met?”

INVESTOR: “The approvals, evidence and timetable questions are:
[Completion Questions]”

FOUNDER: “Let us record unresolved items, obtain advice and produce a clearly versioned draft. We should not announce funding or move money on the strength of this rehearsal.”

REVIEW LIST
Question / answer requiring evidence / responsible reviewer / next discussion:
[Review List]

The conversation ends as a practice exercise. It does not create an investment commitment or rights in the company.

Your next moves

  1. Turn unanswered questions into an evidence and review checklist.
  2. Use the separate term-sheet draft to record specific proposals and binding status.
  3. Agree no investment or rights by treating the practice script as a signed term sheet.

Real-world check

Rehearsal only, not an offer, acceptance or negotiation authority. The script explains questions; it supplies no approved valuation, standard investor rights or automatic ownership.

Sources & official links